Federal regulators assured members of Congress on this week that a government crackdown on bank lending is not the cause of a credit squeeze in some regions.
Behind closed doors, however, bankers are pleading with the regulators to ease up.Senior federal banking officials, appearing before the House Small Business Committee Wednesday, conceded that some banks are making it more difficult for businesses to get loans, particularly for commercial real estate projects.
But they said that is mostly a justified response to a sluggish economy rather than a reaction to intensified scrutiny from government examiners.
Meanwhile, chief executives of some of the nation's largest banks have asked the Federal Reserve Board to bend capital standards while they work off losses from sour real estate loans.